Top 17 Personal Finance Tips to Help You Achieve Financial Freedom
for Wealth: Why Didn't They Teach Me How to Manage Money in School?
Your Simple Guide to Personal Finance and Financial Abundance
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A step that is very necessary toward becoming secured financially is setting short-term, mid-term and long-term financial goals. The fact is, you will actually use more than you should if you arenít working toward anything specific. This will make you to come up short when you are in need of money to clear unexpected bills, not to mention when you are finally due to retire. You can easily get stuck in a terrible cycle of credit card debt and then make you feel like you never have enough money to get you insured the right way, thereby making you more endangered than you need to be to control some of lifeís major risks.
The perfect financial
planning every year gives you the chance to review your goals formally
and then update them (if necessary) and easily review your progress
over the previous year. Now for you to stay on firm financial footing,
you have to always set financial goals.
for quality items at a discount
You can always wait for sales and discounts. If you actually know that you'll need an item but don't really need it immediately, then you can simply wait until it ends up in the bargain bin or you can also try to find a coupon for it.
Always use a coupon
or you can also take advantage of a discount for anything you need or
have already agreed to buy before the discount take place. Cheaper
price attraction is a very simple way to get people to purchase what
they don't need. You have to only buy items that are useful at
particular times of year during the off-season. For instance a winter
coat is normally very cheap during summer weather.
an emergency fund
An accumulation of
money place aside to take care of the financial events life might
throw your way is called emergency fund. These events which are
unexpected can be very costly and also stressful.
Now the emergency fund is usually place aside for about three to six months of expenses to take care of any sudden costs such as a medical or dental emergency, car troubles, job loss, unplanned travel expenses, leaky roof, unexpected home repairs etc.
The fact is you
actually donít know whatís going to take place at some point in
time. And no one really wants to be at the very mercy of lifeís
twists and turns. Your emergency fund will be of so much help if maybe
suddenly you lose your job or the lets say the heater breaks in the
dead of winter. You donít have to be caught off guard!
The fact is the more
steady your money and household situation is; the less you will
actually need in your emergency fund.
Now what if you are part of a two-income family or youíve had a stable job for a lot of years, then a three-month emergency fund will be just okay. However if you are part of a one-income household, earn straight commission or you are self employed, then I can tell you that a six-month emergency fund is actually the best idea because a job loss can easily mean you wonít be able to pay the bills.
A six-month fund is
also better if anybody in your family has a medical issue which is
very chronic and always need doctor or hospital visits. Although there
might be room in your monthly budget to always pay for medical bills,
itís still a very good strategy to always be ready just in case of a
You have to ensure that your emergency fund is liquid, which means it needs to be kept in a place where you can simply get access to it quickly. The best option remains the money market account that has a debit card attached to it or a simple checking account or check-writing privileges. This way, that doctor or wrecker service can easily be paid with the stroke of a pen or swipe of a card.
I know you sometimes
see yourself asking if youíve actually made the best decision on how
to use your money? Or maybe worry that youíre placing problems which
are more immediate such as a wardrobe that is outdated or rumbling
belly over some long term issues such as student loans and credit card
debt? You donít have to always be worried because you are not the
only person on this. Prioritizing your spending can be very difficult,
but if actually done the right way, then prioritization can easily pay
To really know what
buying decisions are most necessary, so many people usually use a
piece of economic theory, even if they donít exactly know they are.
Opportunity cost is what it is called and the main premise of it is to
ask yourself a question such as, ďWhat would exactly take place if I
did x with my money instead of y?Ē For most people who are very
fortunate enough to cover main expenses and then for some, think about
the opportunity cost for things that you actually want to purchase but
donít really need can simply assist in helping you more than you
actually think about.
Itís a very good thing to think about: we work and make money so that we can easily spend it, and we normally spend money on things so that we can always live a comfortable life. But how often do you think about where exactly your money is going and if or not they actually line up with your priorities?
Now itís actually
not hard when it comes to prioritizing your money on paper, ask
yourself whatís necessary to you and only spend your money on it.
But the truth is when it actually comes to putting it into practice,
then it is always a whole different story.
Various people have
priorities that are different, and I so much believe that you always
have to use your money on those things which actually matter to you in
this life. This can be anything such as buying a coffee every morning
because itís actually a thing which makes your workday very good and
to buying more shoes on your shoe collection, this might be because
you care a lot about the shoe on your feet. Money really need to
always go where it matters, and if itís actually going to a place
that you donít care about such as going out on a Tuesday to eat just
because you are too tired to cook, then you seriously need to put your
priorities in order.
How can you achieve
this? All you have to do is pick what actually matters and put a hold
like crazy on the rest.
You can easily write down the top 3 places you want your money to be going which are your money priorities. If youíre absolutely serious about paying off your debt or you just want to save up for a dream car or house, you have to be very sure that these big financial goals are in the list.
things that you need
Do you know that
there are a lot of things we usually buy from time to time that we
don't actually need? I know it's very good to sometimes appeal to your
needs every once in a while, as long as you remain in control.
Don't always buy what
you don't need or what you wonít use. If you are not sure about any
item you are about to buy, then you can easily ask yourself some of
these questions. Now if "yes" is not the answer you gave to
these entire question, then that's actually a very strong sign for you
not to use the money.
I always make use of this item?
you sure you will drink all that milk before it goes bad?
you sure you have enough months in summer left to wear that skirt more
than just few times?
lack something that serves the same purpose? You will have to beware
of some specialized products whose role is easily done by some basic
items you already have. For instance buying ultra-specialized kitchen
equipment, or a special workout outfit when sweatpants and a T-shirt
will work very well.
this product change my life for the better? Do you know that this is a
very tricky question? But you need to buy items that encourage
"bad habits" or cause you to neglect some very important
parts of your life.
going to miss this product if I don't purchase it?
this product always put a smile on my face?
your personal and government bills on time
Organize to keep track of all your bills and make sure they are always paid on-time because it is very important for avoiding past-due bills, shut-off notices, and a lowered credit score. Also when you pay your bills on time, it is very less expensive and it makes you avoid all penalties and late charges.
The truth is getting
a phone call from a creditor or receiving a past due notice in the
mail is not a very good experience at all.
The best and fastest method is to have all of your bills mailed to you via the US Mail, and not having some bills come in the mail and some others electronically. If you wish to have some bills delivered electronically then you always have to use your email program filters so that you can always have all messages from delivered to one folder. Always check your messages on a daily basis and for bills which arrive through the mail, sort it upon arriving home immediately.
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You can easily make a
list of all the debt you owe and the date it will be due. You are also
needed to check the bill off immediately it is paid. All you have to
do is just take a very quick look at your list to know what is due and
Immediately open all
bills to make sure that they are very correct and not overdue. Also do
away with all the additional ads and circulars that normally come with
the bill, and then put the payment stub in the envelope, even if you
intend to make the payment for the bill online.
The best and efficient method to handle your bill payment is to immediately pay the bill, if you always do this then there is no time you will miss a payment or bill. If you canít immediately make payment for the bill, then you can simply put the envelope and bill in a place designated for bills which are still unpaid.
You can also set up
your recurrent bills on a draft program which is automatic, utility
and cable bills are the bills you can do this with. On the actual day
the money will be withdrawn from your account automatically.
You also have to make
sure you keep your check book very balanced, so that you will not write
checks which can easily cause an overdrawn account. Now even if you do
online banking, your bill pay list will still prove very invaluable
because you can simply know when exactly bills are due and then remove
the amount of those bills from your balance before you can write
checks for non-essentials. Whenever you make use of your debit card,
always write down the transaction as if it were a check so that you
will avoid an overdrawn account.
Also remember that
fast payment of bills is very important to your credit rating and to
your credibility as a professional.
less than you earn
I'm surprised how
many people flout this easy but very golden of all golden rules. You
seriously have to live within your means. Always control your
spending. Allow yourself to have a good bit of savings, with which to
invest and get more money.
You should always
live within your means but also live well enough to be very happy. If
what you earn is not enough to drink champagne every week, then you
can drink it only once a month. But do have it if it usually makes you
happy. This is all about being very informed and also in control. You
are required to know what exactly your income is and also what exactly
your outgoings are. You also need to know any expenditure that can
easily come up, any provision you have made for contingency plans and
also any future income that you are entitled to maybe as investments
or interests coming to fruition.
And that actually is what it is about. Where most people normally go wrong is not whether they make enough or they spend too much, because both of those are very simple to overcome. The biggest mistake is not knowing what exactly you are doing, what is up ahead and where you are financially.
Living within your
means is sometimes very tough but if you are in debts always, then all
the prosperity which is yours rightfully is going to some banks which
are faceless and I know they will enjoy spending it. I also bet
they're having champagne so many times in a week. Why encourage them?
is very bad, stay far away from it
Overspending is actually one of the big challenges we have today; spending what we can afford is still the best option. It is very difficult when you see things you really want, but you must first ask yourself can I actually afford it. If the answer is yes then its fine, go get it. But if the answer is no, then you must be honest with yourself, do not make use of the credit card for items that you don't need.
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The worst type of
credit card are store cards, do not make use of store cards unless you
are very sure you can simply pay off the balance every month. If you
actually want to do away from debt then you must forget anything about
store cards. If you also think you can simply do without a credit card
then it will be very good for you to do it. If you also feel that you
need a credit card but you like over spending, then you must always
watch your spending. You donít have to say I will just purchase this
and make the payment later or I will purchase that because I think I
need it. Keeping a very watchful eye on your spending will definitely
assist you in staying away from debt. If you also decide to keep your
credit card then be sure to find the best possible deal. You can
always shop around for the best offers and also look for a card with a
low rate. Once you have found the suitable card, you will have to keep
your spending under control to stay away from debt.
By always watching
the way you spend, you will always be aware of your balance and have a
very good idea of what your bill will be by the end of the month. Now
you have to always try to pay off your balance by the end of the
month. If this becomes a problem then that actually means you
seriously need to keep your spending under more control. Make sure you
have a constant eye on the way you spend. It is very OK to purchase
treats now and then but do not use what you cannot easily afford. You
can also make a very important list of all the things you buy every
month and also try to save on the same list by cutting back. You will
be very amazed to know how much money you can easily save by working
out your spending this way.
Always know that what
you have left at the end of the month is all you have left. Do not
overspend even beyond your means. This is one of the best rules that
will teach you the right way to go away from debt. This can easily be
accomplished with a small discipline and also the desire that you will
get rid of debt. It's a very good feeling when you able to live free
of debt. You can do it, all you just need is to get started and
everything else will be simple.
a good credit rating
A record of how an
individual has borrowed the debt and repaid the same over a period of
time is called credit history. A good credit history is a very
necessary aspect of your life.
Keeping a very good credit rating is of a big importance to maintain the quality of life because it assist you to have quick and easy access to loans at a very good rates of interest and also with lesser formalities.
Establishing a good credit history is the first way towards having a good credit rating. If you actually do not know your credit rating, you can simply check with the local credit bureau and get a copy of the report; this will be the first step towards this end. The absence of good credit history normally affects everybody both young and old. The challenge of not having a very good credit history is also very common among divorcees and widowed women as they might have shared the accounts with their spouse and the credit rating were reported in the latter's name. So building a very good credit history by going to apply for credit in a local business unit or bank may be resorted to in such cases. Another option is to simply open a savings or checking account to show your management of money. Also paying the bills on phones and pagers timely will demonstrate your capacity to pay. Getting a standard or much secured credit card can also easily solve the problem in building up a credit history.
When you are able to
maintain a very good credit history, then it shows your responsibility
in paying off your debts. You should not hesitate to seek the help of
a financial counselor if you feel that the debts are getting out of
your control, they are the ones who can assess the situation better
and find the best option to get you out of the trauma. A credit
history that is bad can easily deny you further loans and also
generate stumbling blocks in finding a good job or letting out an
apartment. The importance of rebuilding the credit history assumes
significance in such a situation. Getting a credit card that is
standard or secured and making repayments and payments of different
bills on time to mention just a few would help you to get back to a
very good credit rating.
get rich quick scheme
There are a lot of get-rich-quick schemes out there now that you have to always avoid. While there are some opportunities online which can help you get-rich-quick easily but with lots of hard work and study, there are also a lot of schemes which you also have to identify and discard.
get-rich-quick schemes come by almost every day and in so many
numbers. This is actually because the internet is a way in which you
can easily reach a lot of people at a very small or no cost at all.
You can easily and pretty much tell these email recipients anything
you want, and some people will definitely catch on to what you are
If you will like to
know the main reason why a lot of people get scammed on these
get-rich-quick schemes, then look no long further because you can take
a good look at the original get-rich-quick promise, which are casinos.
At a casino, it is the fun of winning so much at one particular time
and losing everything in the same night or even so many times a night.
With a get rich scheme, it is actually like giving someone hope for a
very good future. It also invokes a very good sense of duty or a
feeling as if one is actually doing what is the right thing for their
families and themselves, while seeing some other people as they are
not. This can give the person that is being schemed with so much
increased confidence as well as a sense of hope that is increased.
This hope can easily and always work against the person who is being
schemed because they will keep on investing and investing their money
so that the hope can always keep alive, because if they actually stop
paying on the get-rich-quick, then they run the risk of losing out
everything if the scheme is in fact very true.
schemes are a very dangerous and serious issue. They are sometimes on
many news articles and are always featured all the time in order to
just objectify the people that have already been schemed. One of the
most honest news reports that I have ever seen on the matter is the
Dateline NBC report "To catch an identity thief". Chris
Hanson was featured, he was the one who found people that has already
be schemed and shows them that all kind of person can easily fall for
a get-rich-quick scheme and that nobody is immune from it. Chris also
follows so many schemes from start to conclusion, before he finally
reveals to the people who are the perpetrators of the get-rich-quick
scheme that he knows of their strategy and that they are on camera and
all America are seeing them.
multi-level marketing programs
One thing that has
become a rage among the people and small investors is Multi Level
Marketing business. A lot of people have actually gained lots of
success by using this very important marketing technique but at the
same time, so many people have fallen victim to certain swindlers who
run the fake Multi Level Marketing businesses. Outlined below is a
detailed list of important facts that can assist you to easily avoid
becoming a victim of any Multi Level Marketing scam.
Always make sure that
you do not link or identify with a new company that has very high
expectations. If the company is promising to give you lots of money
for just a single referral, then just know that there is something
very fishy there for sure. You have to make sure that you see the very
logic behind any offer a company is offering to you so that you can
simply become its affiliate.
Multi Level Marketing
is actually a process and it normally takes lots of time to make your
network grow. If your affiliate put pressure on you to expand your
network in a very short period of time, then the company has a plan of
actually trying to rob you off your hard earned earnings and benefits.
You have to always make sure that you cut loose before anything
unfavorable or bad begins to happen.
Asking the middle
path is always secure and safe. Associating yourself with a mid-level
organization that has a very good payout is always helpful. But, it
needs lots of dedication and hard work to rise up in the hierarchy.
Do not forget to
always get the invoices of initial payments you make to become a
member of any affiliate network. Some physical MLM businesses need you
to start by paying initial membership fee. But, the fake MLM
businesses sometimes try not to give any invoice, because they
actually do not have any business proposal.
track of your financial records
How do you think you
can actually be secure financially if your financial records are at a
mess? Organizing your financial records needs lot of consistency and
discipline. If you aren't disciplined enough to file away some very
important papers and then throw out the useless ones, so how then will
you be able to discipline yourself so that you can easily keep track
of your retirement savings and some other important financial records?
The first thing and
most important thing that you need to do is to buy a fireproof cabinet
so that you can keep copies of some very important financial papers.
Then also get a good and safe-deposit box to simply secure documents
such as your birth certificates, will, insurance papers, passports,
adoption papers, mortgage papers, car titles and so on. You will have
to keep copies of all of these papers at home in your fireproof
cabinet for simple access.
Now what are the
right type of documents you should keep? Keep all documents that are
legal including your living will and also power of attorney. Also keep
tax returns and investment records from your brokerage firm, mutual
fund companies and retirement accounts need to also be kept for some
tax purposes. You also need to keep all insurance policies such as
car, life, liability and homeownerís policies.
Always keeping all
these documents very organized takes a lot of effort and time.
Spending just a few minutes every day to clear and put away and also
file your financial papers is very easy and yet very effective in
staying organized. It doesn't necessarily have to be very big or hard.
Something as easy as just keeping a very large manila envelope on your
table or in the drawer of your desk always works to put all tax
related receipts works to keep the clutter down.
You have to shred any
outdated policies to reduce clutter. You actually don't need to keep
insurance policies that are expired or warranty information for
products you no longer own.
Are you aware that
spending money is actually a big part of life? Almost everybody knows
this but what people donít know is that good spending habits are
very important to your financial success just like getting rid of your
debt and saving money.
When you have
spending habits that is good, it makes you not to pay too much for a
product, overspending in your restaurant budget, or impulse buying a
curling iron that doubles as a knife sharpener from an infomercial.
Nobody really wants that.
14...Here are some ways to put good
spending habits into place so you can make smarter purchases.
before you shop.
your spending triggers
an accountability partner
shop while you wait
for savings before you buy
Do you know that
having the proper type of insurance is good to sound financial
planning? Some people may have some form of insurance but only few
actually understand what it is or the reason one must have it. For
most people insurance is a form of investment or a good tax saving
Now what exactly is
insurance? It is a way of rolling out the financial risk of a business
entity or an individual to a group of people or business entities just
in case an unfortunate thing takes place. The cost of being insured is
actually the monthly or annual compensation that is being paid to the
insurance company. But in the purest form of insurance if the event
that was predefined does not happen during the period specified, the
money paid as compensation can never be gotten back. Insurance is
actually a means of risk spreading among a large number of people who
are insured and make lighten their financial burden in the event of
Whenever you decide
to get protection from financial risk and make a contract with any
provider of insurance then you automatically become the insured and
the insurance company will become your insurer.
The fact is any risk
which can be quantified in terms of money can be insured. For instance
just to protect loved ones from loss of money due to premature death
one can easily have a life insurance policy. To also protect yourself
and your family members against any unforeseen medical expenses you
can simply get a Mediclaim policy. You can have a motor insurance
policy to protect your vehicle against robbery or damage in accidents.
You can choose a home insurance to protect your home against theft,
damage due to fire, flood and other perils.
The most popular types of insurance around the world are health insurance, motor insurance and life insurance.
retirement planning strategies
I know you might
already have an idea of what you plan to do immediately you retire:
purchase a vacation property, travel the world, renovate the family
home etc. The fact is your retirement dreams will definitely come to
fulfillment if you start planning them right from this moment.
So to simply
implement a savings plan that will assist you live out the life you
want after retirement, you must start by taking a look at your current
assets in relation to your objectives, however you also have to think
about your investments fiscal consequences, your income sources, your
succession plan and all other things that can easily affect your
savings ability and your future income.
You can simply get an
advisor who has the necessary experience to assist you in this
process. With his assistance, you can easily and rightly define your
objectives and retirement needs, as well as knowing the perfect plans
to use at some point in your life.
is the main key to successful investing
There are a lot of
keys to successful investing, and patience remains one of them. But so
many people want all things to take place very quick. We get very
annoyed sometimes if we are in a building and the Wi-Fi isnít fast
enough. Just like most times when our Snap chat takes so long to send,
we become very impatient and frustrated.
The point is that we
always expect result straight away and this is not right when we are
hoping to be successful in our investing.
While efficiency and
convenience is good, I believe the habit of hoping to get fast results
is very bad for our future. In wanting all things to happen very fast,
we normally lose our patience to hold out for opportunities and dreams
which are more fulfilling.
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